The 'extraordinarily expensive' project reshaping a state — and drawing political battlelines

Victorian Premier Ben Carroll has announced $2 billion in cuts to the state's largest infrastructure project, the Suburban Rail Loop (SRL), saying his government "respects your money".

His comments underline the controversy over the 90km underground rapid transit project, which will link Melbourne's middle suburbs and allow passengers to travel across the city without passing through the CBD.

The state government says the mega-project will reshape Melbourne into a multi-nodal city, bringing services and jobs closer to where people live, building more homes, and creating more jobs.

But its enormous cost, disputed economic benefits and lengthy construction timeline have also made it one of Australia's most controversial infrastructure projects.

Liam Davies, a lecturer in sustainability and urban planning at RMIT University, said the SRL was a step towards transforming Melbourne's city-centric public transport system into an interconnected network.

Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.

"Melbourne's greatest challenge is that it has become an extraordinarily large city, physically," he told SBS News.

"We can't just adopt the transport strategy for a denser, more compact city like London. We need to do something of our own, and the SRL is an attempt to do that in a Melburnian context."

With Labor and the Coalition deeply divided on the SRL, the project's future could be decided when Victorians head to the polls in November.

The SRL will connect Melbourne's middle suburbs from Cheltenham in the south-east to Werribee in the west via Melbourne Airport through a 90km underground rail line.

The project is split into three stages. The first section — SRL East — is under construction, running from Cheltenham to Box Hill via six new underground stations. The first trains are expected by 2035.

Critics argue the mega-project's business case doesn't stack up, and the multi-billion-dollar price tag is a financial liability for Victoria, which has the second-highest debt per capita of any state or territory, behind the Northern Territory.

More than $33 billion has already been invested in SRL East, according to the premier.

A Parliamentary Budget Office analysis puts the price tag for building the East and North sections at $96.4 billion, though there is currently no fully costed estimate for the entire project including SRL West which is much further behind on the timeline.